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NVR, Inc. Message Board

  • BigDaddyCass15 BigDaddyCass15 Apr 24, 2007 2:32 PM Flag

    only $100 overvalued and rising

    NVR: NVR is the most conservative homebuilder in terms of how it handles investments in land. NVR exclusively uses options to purchase land and only takes possession when it is ready to develop. NVR is also unique in that it has more cash than debt. Because of this business strategy, NVR typically trades at a premium to the group, currently being at 4.0x net book value.-Another factor in NVR�s superiority to the general homebuilding group has been its lack of involvement in plot development, where the costs of readying land for building have soared. As we noted earlier in talking about KBH, exposure to land development is generally not positive, with the primary exception being in the case of TOL, which has the engineering expertise necessary to lower costs.

    Because of NVR�s unique characteristics and the age of its options contracts, which were generally negotiated during years when land was cheaper, we believe 3.5x current book is a fair multiple for NVR; this puts the company�s shares as being worth $680.

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    • retail short squeeze don't end with $100 (15%) for a $700 stock. It would most likely end with a sticker shock price of $1,000/share price tag. Dow breaks above 13000, NVR goes to $1000 in days.

    • Only 680 ??. I thought NVR was worth atleast 5-6 times that. NVR is the only company that has sold houses in OTHER planets too. NVR boasts a cash horde of more tha $7.6 trillion USD. This is in addition to their spending of about $3.8 trillion USD for building houses for free in poor countries in the African and Asian continent.

      Also, NVR normally builds a house for under 50K and sells the same for about 20-30 million making a hefty profit on each house sold. On an average they sell about 5000 houses per day and this translates to a terrific bottom line for the company.

 
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